Mario Draghi, who last week submitted his resignation as prime minister of Italy, has an extraordinary résumé for a contemporary statesman: executive director of the World Bank in the 1980s; director general of the Italian Treasury in the 1990s; governor of the Bank of Italy in the 2000s; and president of the European Central Bank in the financial crisis of the 2010s, during which he is credited with having saved the euro.
To partisans of Mr. Draghi’s government, of the European Union and of the global economy, he has become a symbol of democratic continuity in the face of economic upheaval and partisan extremism. In this view, Mr. Draghi’s departure, prompted by the boycott of a confidence vote by three parties in his government, portends catastrophe. The Italian foreign minister, Luigi Di Maio, called it a “dark chapter for Italy.”
For now Mr. Draghi continues as a caretaker prime minister. The front-runner to replace him after elections in September is the nationalist-populist politician Giorgia Meloni. In one of its newsletters, JPMorgan described the parliamentary maneuvers that led to Mr. Draghi’s ouster as a “populist coup.” Since Mr. Draghi has backed sanctions on Russia for its Ukraine invasion, Italian columnists condemn his opponents as “filoputiniani,” or “Putin-lovers.”
But there is an odd thing about Mr. Draghi’s role as a symbol of democracy: No voter anywhere has ever cast a ballot for him. He was installed to break a political impasse in early 2021 at the request of President Sergio Mattarella, who is himself not directly elected. Honorable and capable though Mr. Draghi may be, his resignation is a triumph of democracy, at least as the word democracy has traditionally been understood.
Italy’s problem is that its governments now serve two masters: the electorate and global financial markets. Maybe this is true of all countries in the global economy. But it is not how democracy is supposed to work, and Italy is in a particular bind. With government debt above 150 percent of gross domestic product, population falling and interest rates rising, Italy is trapped in a common European currency that it cannot devalue.
Several times in recent decades, ordinary politics in Italy has been suspended and “technical” governments such as Mr. Draghi’s have been brought in to institute emergency measures. This means that the Italian government is listening less to citizens even as it is calling on them to make big sacrifices and adjustments.
The Italian electorate seems to be turning durably populist. Italy’s 2018 elections were the third great anti-systemic upheaval of the middle of the last decade, after Brexit and Donald Trump’s election in 2016. The left-populist Five Star Movement, founded by the comedian Beppe Grillo, took a third of the vote. That party opposed corruption and pollution and called for redistributive social programs, even passing a version of a basic income. It ruled in coalition with the League, a right-populist party led by Matteo Salvini, who focused on sealing off Italy’s Mediterranean coast to African immigration. The government, led by Giuseppe Conte, was wildly popular.
When Covid struck in 2020, the European Central Bank promised Italy 200 billion euros in pandemic relief. Prime Minister Conte, by this time running a more traditional progressive government in coalition with social democrats, was still very popular. But neither the European Union nor the Roman establishment trusted him to spend all that money. When the business-friendly former prime minister Matteo Renzi took his allies out of the coalition, a government of national unity (including every party except Ms. Meloni’s on the right-most edge) was formed around Mr. Draghi, who, it was said, had the “credibility” to calm markets.
But what does Mr. Draghi’s credibility consist of? In a democracy, credibility comes from a popular mandate. In a “technical government,” credibility comes from connections to bankers, regulators and other insiders. When a person in Mr. Draghi’s position takes power, it can be unclear whether democracy is soliciting help from financial institutions or whether financial institutions have backed democracy into a corner.
Last week, in the wake of Mr. Draghi’s resignation, an adviser for the Italian bank UniCredit posed a hypothetical question about the European Central Bank: “What if right-wing candidates do well and the bond market sells off — should the E.C.B. intervene then?” The “risk” that technocratic risk managers are managing may be democracy itself.
The European Union’s Covid relief plan was meant to push Italy toward free-market reforms. In return for aid, Brussels got a bigger say in how Italy is governed. Italy has received only 46 billion euros of the sums promised; dozens of reforms will be required before the European Union doles out the rest.
These reforms have come to seem obnoxious to many voters. For example, the European Union wanted Italy’s beaches opened to market competition. The Italian seashore is public property. The state gives concessions to small businesses that manage beaches. Such businesses, often kept in the same family for generations, employ some 100,000 Italians.
Partisans of the reforms, which were backed by Mr. Draghi, call the families that run those ancient beach concessions “monopolists” who profit from public property. Opponents of the reforms, the most voluble of whom has been Mr. Salvini, would say the epithet “monopolist” was a better fit for the international hotel chains likely to wipe those small businesses out.
The European Union also wanted Italy to change its laws on car transport. There is a special licensing arrangement for car-and-driver operators in Italy, distinct from the arrangement for taxis. Licenses are expensive. It is hard to form consortiums in which one entrepreneur can manage a stable of gig workers who do the driving. Up till now, Uber has operated in Italy in only the most limited way.
Supporters of market reform likely consider it grand larceny that a taxi from Milan’s center to the distant Malpensa airport should cost 100 euros, and they likely see competition from Uber as the way to fix it. For opponents, Uber is a problem, not a solution.
Many of these reforms were due to be hammered out before the end of the year. The timing of Mr. Draghi’s departure is thus not coincidental. By the time he appeared before the Senate last week to make the case for carrying on, many Italians were smarting at affronts to their democracy, affronts that were not really justified by the European Union’s interest in macroeconomic stability.
That is a legitimate interest. Italy’s debt may yet have repercussions for its citizens and Europe’s. But no one has yet arrived at a satisfactory way to address the problem of debt in any heavily indebted country. Fixing such problems can require injecting outside money into a political system, and this turns out to be hard to do in a nonpartisan way.
You can have the money to rescue your country if Mr. Draghi is your prime minister, Italians were essentially told, but otherwise not. Under the circumstances there is nothing “populist” or Putin-loving or unreasonable in worrying about the consequences for democracy.